Question

Negative inventory value with zero quantity

5 replies
71 views

Dear Sir or Madam,

Please help me out here - I have a negative inventory value given zero inventory qty.

By looking at the details it is obvious that is due to the unit cost variance. My opening inventory was of 2,746 pieces at $2.515 each totaling $6,906.94.

I had to make an adjustment to move it all out in the following year. The unit cost per transaction changed and ranged on this between $4.51/ea to 4.30 ea, bringing my total quantity to zero and value to ( 5,080.35).

Please see the print screen below.

As we do not control the unit cost when the qty adjustment is made, how can I correct my inventory value here?

Please advise.

Thank you very much in advance.

Date	Transaction Type	#	Qty	Rate	FIFO Cost	Qty On Hand	Asset Value
Beginning Balance						2746	$6,906.94
04/01/2021	Inventory Qty Adjust	8090	-729	4.51	-3,289.34	2,017.00	$3,617.60
04/01/2021	Inventory Qty Adjust	8090	-70	4.49	-314.25	1,947.00	$3,303.35
04/01/2021	Inventory Qty Adjust	8090	-6	4.49	-26.94	1,941.00	$3,276.41
04/01/2021	Inventory Qty Adjust	8090	-115	4.34	-499.15	1,826.00	$2,777.26
04/01/2021	Inventory Qty Adjust	8090	-70	4.34	-303.83	1,756.00	$2,473.43
04/01/2021	Inventory Qty Adjust	8090	-6	4.34	-26.04	1,750.00	$2,447.39
04/01/2021	Inventory Qty Adjust	8090	-1750	4.30	-7,527.74	0.00	-$5,080.35

QuickBooks Online

R

Rea_M

Level 10

Thanks for providing the complete details of your inventory value concern, @Tali.

Let me guide you on how you can correct your inventory value to keep your financial data accurate in QuickBooks Online (QBO).

You can pull up the Inventory Asset account's QuickReport to find the transaction(s) that cause your negative inventory value. To do this, here's how:

Click Accounting.
Go to Chart of Accounts.
Select the Inventory Asset account, click the View register drop-down arrow, then select Run report.

Once you find all transactions causing the discrepancy, make the necessary updates to correct your data.

In case your negative inventory value issue continues, you can make adjustments by creating a journal entry. Before doing so, I encourage you to consult your accountant. They can guide you what the appropriate accounts to use and provide expert advice tailored to your business needs.

Also, you can use reports to see your best sellers, what’s on hand, and the cost of goods in QBO. To guide you with the process, you may want to check out this article: Use reports t see your sales and inventory status.

Please feel free to leave a comment below if you have other concerns about managing inventory value in QBO. I'm always ready to help. Take care, @Tali.

T

TaliAuthor

Hi Rea_M,

Thank you for getting back to me so quickly 🙂

I've noticed that the transaction that caused this discrepancy was from the point where inventory was moved from the Desktop to the Online version, which was in a different year.

The system made 2 transactions called START and on one of the transactions, the unit cost was $1.90 which is what's causing this big negative balance.

Please advise how exactly can I correct it. I know how to correct the overall inventory value through Journal Entry, however, I would like to correct it so that this particular inventory item shows zero balance going forward.

Please guide me through this.

Thanks&Regards,

Tali

C

Candice14

Level 8

Good afternoon, @Tali.

Thanks for coming back to the Community and providing further details about the negative inventory value.

With the information you described, I recommend creating and using a Journal Entry to help fix this problem like my colleague said above.

If you're unsure about this route, consulting with your accountant to be sure of how to properly correct this for your books would be best.

Don't hesitate to reach back out if you have any more concerns. Keep us updated on how the conversation goes with your accountant. Have a wonderful day!

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